China’s Xi promises market opening as import fair begins

Chinese President Xi Jinping during the opening ceremony for the first China International Import Expo (CIIE) in Shanghai, China, on Monday.
Image Credit: REUTERS

Shanghai: President Xi Jinping promised Monday to open China’s growing consumer market wider at a fair designed to help counter charges that Beijing abuses the global trading system.

The China International Import Expo, held at a Shanghai convention centre, is part of efforts to develop China-centred trading networks while resisting pressure to roll back industry plans that Washington, Europe, Japan and other governments say violate its market-opening obligations.

“It is our sincere commitment to open the Chinese market,” Xi said in a speech to a VIP audience that included Russian Prime Minister Dmitry Medvedev.

Xi promised to cut costs for importers and improve consumer spending power to help boost imports. He made no mention of the stand-off with US President Donald Trump over Chinese plans for state-led development of technology industries.

But in an indirect reference to Trump’s ‘America first’ policies and threats of import controls, Xi appealed to other governments to “jointly safeguard free trade.”

Some 3,600 companies from 152 countries selling everything from Egyptian dates to German factory machinery are attending the five-day event at the cavernous convention Centre that bills itself as one of the world’s biggest buildings.

Prime ministers and other senior officials of governments including Egypt, Pakistan and Vietnam also were attending the fair. The United States — China’s biggest trading partner — did not send a high-level envoy.

Deflecting complaints

Xi’s government is emphasising the promise of a growing consumer market of 1.4 billion people to help deflect the complaints that it subsidises fledgling technology suppliers and shields them from competition.

Business groups say China still hampers access to industries including finance and logistics. They say regulators are trying to squeeze foreign competitors out of promising fields such as information security.

Xi promised steps that might address such complaints if carried out, including easing restrictions on foreign competitors in finance, education, telecoms and health care. He gave no details or a timetable but said the ruling party already was carrying out changes promised over the past year.

Businesspeople and economists welcomed the promises but said Beijing needs to act promptly to dispel concern about the cooling, state-dominated economy.

Tacit acknowledgement

The speech “is at least a tacit acknowledgement that much needs to be done,” said the chairman of the American Chamber of Commerce in China, William Zarit, said in an email. “We will see if this leads to the timely sweeping reforms needed for a fair and reciprocal bilateral commercial relationship.”

The ruling Communist Party is trying to restore public confidence after economic growth sank to a post-global crisis low of 6.5 per cent over a year earlier in the last quarter. The country’s stock market has sunk 25 per cent this year, becoming the world’s worst performer.

Xi acknowledged some Chinese industries face “growing risks” but said efforts to shore up growth are already paying off.

China’s $12 trillion-a-year economy is “a sea, not a small pond” and can withstand shocks,” he said.

“A storm can overturn a small pond, but not a sea,” he said. “After more than 5,000 years of hardship, China is still here. Facing the future, China will always be here.”

China has cut tariffs and announced other measures this year to boost imports, which rose 15.9 per cent in 2017 to $1.8 trillion (Dh6.61 trillion). But none addresses US complaints that prompted Trump to impose penalty tariffs of up to 25 per cent on $250 billion of Chinese imports. Beijing has responded with tariff hikes on $110 billion of American goods.

The fair lets Beijing show it is “making efforts to boost imports,” said Rajiv Biswas, chief Asia economist for IHS Markit. But a deal with Washington “will require significant measures by authorities to reduce bilateral trade imbalances and to protect US intellectual property rights,” he said.

Chinese leaders have rejected pressure to roll back plans such as ‘Made in China 2025’, which calls for state-led creation of global champions in robotics and other fields that might challenge US industrial leadership.

Last week, Trump and Xi had what China’s foreign ministry called an “extremely positive” phone conversation. They plan to meet during this month’s Group of 20 gathering of major economist in Argentina, but private sector analysts say a breakthrough is unlikely.

Chance to repair image

Already the No 1 market for its Asian neighbours, China is seeking to expand commerce by building ports, railways and other infrastructure across 65 countries from the south Pacific through Asia to Europe and Africa. The Shanghai expo also gives Beijing a chance to repair its image as a positive for global development following complaints that projects it sponsors under its Belt and Road initiative leave host countries with too much debt, with too little work goes to local companies.

Exhibitors at the event included US automakers and technology suppliers, European pharmaceutical and clothing brands, African tea exporters and Japanese electronics manufacturers.

At a stand for Nicolas Correa SA, a Spanish factory equipment maker, salesman Carl Che showed off a milling machine the size of a bus that can cost between €1 million and €5 million (between Dh4.18 million and Dh20.9 million).

Che said Chinese manufacturers of wind turbines, aircraft and nuclear power equipment have bought 406 of the machines since 2003 and the company is looking to expand to food, health and other industries.

The expo is “a good chance to show ourselves to the whole of China,” said Che. “Today, we received five customers who are very interested. It is just a matter of price.”

The China agent for Metal Shark Boats, a New Orleans-based builder of heavy duty vessels for law enforcement and fire agencies, had two 13-metre-long (40-foot-long) patrol boats sitting in metal cradles.

It has sold five boats to China’s customs agency and the company is marketing itself to environment and other regulators, said Sherman Ge, chairman of Shanghai-based Breeze Tech.

The expo also highlights the blurring of lines between Chinese and foreign industry as Chinese companies expand abroad.

Exhibitors promoting imports into China included Sweden’s Volvo Cars, a unit of Chinese automaker Geely Holding General; Electric Appliances, part of China’s Haier Group in 2016; and California-based solar supplier MiaSole, part of Beijing-based Hanergy Group.

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